Healthy Skepticism Library item: 742

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Mercola.com
Drug Company Empire Ready to Fall
Mercola.com 2005 Jan 8

Full text:

The $500 billion drug company dynasty finally appears ready to fall as the industry struggles to save face among continual reports of serious problems with well-known drugs. Meanwhile, drug research and development is on the decline and the industry is struggling to find new medicines.

Pfizer, AstraZeneca and Eli Lilly, all major players in the drug company market, each disclosed major problems with popular medications — all in the span of about half a day:

Pfizer announced an increased risk of heart problems in people taking the painkiller Celebrex (one of the world’s best-selling medicines).
AstraZeneca reported that lung cancer drug Iressa, which was approved in the United States in 2003, did not prolong lives in a trial.
Eli Lilly warned that Strattera, an ADHD drug, might cause severe liver injury. The news pushed stocks down, causing the market value of the three companies to decline by more than $30 billion.

But it’s not just these three companies that need to worry — all major drug companies are at risk of similar declines. Although spending on drug development has nearly doubled to about $33 billion, new drugs approved by the Food and Drug Administration (FDA) have declined significantly from 53 in 1996 to 21 in 2003.

The major threat to companies (aside from growing negative publicity due to dangerous side effects)? If fewer drugs are produced, investors will want to cut the companies’ research spending. Meanwhile, governments may force companies to cut drug prices to support programs like Medicare and Medicaid.

The result? A less profitable industry that produces fewer new drugs.

The drug companies are not going out without a fight, however. In an attempt to save their falling dynasty, drug makers have been:

Pursuing aggressive ad campaigns to doctors and patients
Increasing drug prices
Attempting to extend patents on existing medications The efforts have been a mixed blessing for the industry. While they’ve protected drug company profits in the meantime, they’ve also irritated the industry’s target market — both consumers and governments alike — and have even caused a political reaction in the United States and Europe.